NASDAQ

Despite all the hopes and prayers of illiterate farmers everywhere, Chinese stocks refuse to hold a bid and down 3-4% at the open amid suspension of around 160 individual securities. In the pre-open to open, Shanghai Composite is down 3.2%, Shenzhen is off 3.5%, and China's Nasdaq - ChiNext is down 3.8%. This leaves ChiNext down over 40% from its highs as the cost of insuring downside in Chinese stocks explodes to record highs. As China goes through the 1929 playbook to save its 'market', it appears "momentum" has shifted.

On what is obviously a quiet day, with US cash markets closed, US equity futures drifted quite notably weaker from overnight highs. Aside from total chaos in the last second of trading today, Nasdaq futures were down 0.3% (having been up over 0.2% at Europe opened) and The Dow dropped 80 from the highs. It appears the machines forgot it was a holiday as the standard US open to EU close trend reversal occuurred before dropping after Europe closed.

Over the weekend, the lines in Greece stretched along the street. Around the corner. Down the block. Lines to get cash. Lines to buy gas. Lines of people eager to get their hands on something of value. Food. Fuel. Cash. Pity the poor guy who was last in line... As more and more people turn to gold as a way to avoid standing in lines, the feds could ban it again. But when we close our eyes and try to peer into a world where gold is illegal, what we see is a world where we want it more than ever.

Having thrown the kitchen sink at their collapsing ponzi-scheme of a market in the past two days, only to see stocks open and crash once again overnight, it appears The PBOC went full intervention-tard in the middle of the morning session. With CHINEXT down over 7% and Shnghai down over 4%, the manipulation was rooted in CSI-300 futures as while cash markets saw margin calls and liquidation, futures were surging. By the close China's 'Nasdaq' had ripped 13% off its lows and the broad market's intrday swing was the largest since 1992... The PBOC's got your back.

In the last 2 days, PBOC has thrown everything at the ponzi-fest they call a rational market. An RRR cut, a Benchmark rate cut, a rev repo rate cut, a CNY50 Bn rev repo injection, a stamp duty cut, IPO halts (cut supply), and last but not least permission to speculate with a reassurance that shares on a solid foundation. The outcome of all this policy-panic - CHINEXT (China's Nasdaq) is down another 6% today (down 25% in 3 days) and aside from CSI-300 futures, all other major Chinese indices are in free-fall. Add to that the fact that industrial metals are collapsing with steel rebar limit down and it appears Central Bank Omnipotence is under threat.

Tomorrow at 8pm, we’re adding an extra second to the day. Over the past 200 years, the length of a day has increased by two milliseconds, which is all well and good, but the insane accuracy of the atomic clocks we’ve been using since 1967 doesn’t account for that, so we’ve had to add leap seconds 25 times since 1972. Tomorrow, however, is the first time a leap second will be added during trading hours since markets went electronic. 

We're gonna need a bigger rate cut...

SHANGHAI COMPOSITE HEADS FOR BIGGEST 3-DAY DROP SINCE 1996
CHINA CSI 500 STOCK-INDEX FUTURES FALL BY MAXIMUM 10% LIMIT

"It's time to wake up," because, the fate of the world is in the hands of illiterate Chinese farmers and Greek grannies.

Bad breadth is everywhere in US equity markets...

Is it time to step in and buy the dip in Chinese mainland shares after last week’s harrowing 13% decline on the SHCOMP? Absolutely not, Morgan Stanley says.

*CHINEXT PLUNGES 8.3%, BIGGEST ONE-DAY LOSS EVER (down over 27% from highs)

Nope - no bubble here at all...

With 10% declines following the past 5 occurrences, the after-effects of this development have not been kind to the Nasdaq.